Government Investigating Apple On Music Practices

The U.S. Department of Justice is reportedly investigating Apple, to determine whether the company used its position as the nation’s largest music retailer to unfairly influence music labels. Apple allegedly told labels not to offer exclusives to Amazon.com, and punished those that didn’t comply by dropping marketing support on iTunes.

According to The New York Times:

The antitrust inquiry is in the early stages, these people say, and the conversations have revolved broadly around the dynamics of selling music online.

But people briefed on the inquiries also said investigators had asked in particular about recent allegations that Apple used its dominant market position to persuade music labels to refuse to give the online retailer Amazon.com exclusive access to music about to be released. …

Though the Justice Department’s inquiry is preliminary, it represents additional evidence that Apple, once the perennial underdog in high tech, is now viewed by government regulators as a dominant company with considerable market power.

Nobody was willing to talk to The Times on the record, though one antitrust lawyer helpfully commented that “without knowing what acts or practices they are targeting, it’s difficult to say exactly how big a problem this is.” The paper also pointed out that Apple has recently opened itself up to more competition, by allowing streaming services such as Pandora and Rhapsody onto its devices.